This simple credit card trick could save you thousands
A SURVEY released today shows most Aussies, while spending big on credit cards, are not taking advantage of the points they are accumulating in the process. And model, business entrepreneur and fashion legend Megan Gale wants this to change.
The Australian Investments, Securities and Investments Commission shows on its credit card debt clock that Aussies have about $32billion owing on their credit cards (the figure goes up and down according to monthly trends), with an average debt of $4300 per card holder.
The debt alone shows Australia is a nation that loves to flash the plastic, but Aussies are not necessarily using the points they receive with the transactions they make on their cards.
According to Julie Nestor, Vice President Customer Marketing and Experiences for American Express Australia & New Zealand, Australians have about 7500 points on their primary credit card.
The American Express' Rewards Rethink survey of 1000 Aussie households found more than a quarter (27%) of credit card holders with rewards and benefits have not claimed anything in the past two years with the main reason (35%) being a lack of understanding of what they can be used for. More than half of the respondents said they did not research the rewards on offer before choosing their credit card.
Gale said, in the past and due to a hectic schedule, she too had been guilty of not checking the points on her credit cards.
"I'm a busy working mum. There's a lot of people out there who are juggling their career, juggling their children, and it's really easy to not pay attention to the things you're missing out on like what you could be getting from your credit card. Especially when the rewards are concerned," she said.
"A lot of people entered into or applied for their credit card without really researching the rewards on offer before choosing."
The survey did, in fact, find almost half (42%) of respondents said that they did not research the rewards on offer before choosing their credit card - a decision one third of the group regretted.
However, Gale has changed her ways when it comes to her credit card rewards points and is urging other consumers to do the same. Here are her top tips:
1. Use the points to pay off the credit card balance
2. Shop for fashion, homewares or do Christmans shopping with the points.
"You can get any number of gift cards using your points, which I think is another great one," Gale said.
3. Use the points for things like concert tickets or sporting events.
"People are using their tickets to pay for entertainment value but not necessarily using their points for it as well," Gale said.
Now is the time for Australians to take a close look at their credit card, according to Steve Hui, CEO of iFLYflat - The Points Whisperer, which educates consumers and business owners how to maximise their credit card rewards and spend them wisely.
Hui said: "Due to new interchange reforms introduced by the Reserve Bank of Australia, the credit card rewards landscape will change and many consumers will start seeing their rewards programs become even less rewarding. Now is the perfect time to reassess what cards you are using."